KOMBUCHA

II 117TH CONGRESS 1ST SESSION S. 892 To amend the Internal Revenue Code of 1986 to ensure that kombucha is exempt from any excise taxes and regulations imposed on alcoholic beverages. IN THE SENATE OF THE UNITED STATES MARCH 23, 2021 Mr. WYDEN introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To amend the Internal Revenue Code of 1986 to ensure that kombucha is exempt from any excise taxes and regulations imposed on alcoholic beverages. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Keeping Our Manufac- 4 turers from Being Unfairly taxed while Championing 5 Health Act’’ or ‘‘KOMBUCHA’’. 6 VerDate Sep 11 2014 00:58 Apr 13, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S892.IS S892 kjohnson on DSK79L0C42PROD with BILLS 2 •S 892 IS SEC. 2. TAX-FREE PRODUCTION OF KOMBUCHA. 1 (a) EXCEPTION FROM DEFINITION OF BREWER.— 2 Subsection (d) of section 5052 of the Internal Revenue 3 Code of 1986 is amended to read as follows: 4 ‘‘(d) BREWER.— 5 ‘‘(1) IN GENERAL.—For purposes of this chap- 6 ter, the term ‘brewer’ means any person who brews 7 beer or produces beer for sale. 8 ‘‘(2) EXCEPTION.—The term ‘brewer’ shall not 9 include any person who— 10 ‘‘(A) produces only beer exempt from tax 11 under subsection (e) of section 5053, or 12 ‘‘(B) produces only kombucha exempt from 13 tax under subsection (i) of such section.’’. 14 (b) EXEMPTION FROM TAX.—Section 5053 of the In- 15 ternal Revenue Code of 1986 is amended— 16 (1) by redesignating subsection (i) as subsection 17 (j), and 18 (2) by inserting after subsection (h) the fol- 19 lowing new subsection: 20 ‘‘(i) PRODUCTION OF KOMBUCHA.— 21 ‘‘(1) IN GENERAL.—Subject to regulation pre- 22 scribed by the Secretary, any person may, without 23 payment of tax, produce kombucha for consumption 24 or sale. 25 VerDate Sep 11 2014 00:58 Apr 13, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S892.IS S892 kjohnson on DSK79L0C42PROD with BILLS 3 •S 892 IS ‘‘(2) DEFINITION.—For purposes of this chap- 1 ter, the term ‘kombucha’ means a beverage which— 2 ‘‘(A) is fermented solely by a symbiotic cul- 3 ture of bacteria and yeast, 4 ‘‘(B) contains not more than 1.25 percent 5 of alcohol by volume, 6 ‘‘(C) is sold or offered for sale as 7 kombucha, and 8 ‘‘(D) is derived from— 9 ‘‘(i) sugar, malt or malt substitute, 10 tea, or coffee, and 11 ‘‘(ii) not more than 20 percent other 12 wholesome ingredients.’’. 13 (c) EFFECTIVE DATE.—The amendments made by 14 this section shall apply to calendar quarters beginning 15 after the date of enactment of this Act. 16 Æ VerDate Sep 11 2014 00:58 Apr 13, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6301 E:\BILLS\S892.IS S892 kjohnson on DSK79L0C42PROD with BILLS